Well-dispersed SnO2 nanorods with diameter of 4-15 nm and length of 100-200 nm are synthesised through a hydrothermal route and their potential as anode materials in lithium-ion batteries is investigated. The observed initial discharge capacity is as high as 1778 mA.h/g, much higher than the theoretical value of the bulk SnO2 (1494 mA.h/g).During the following 15 cycles, the reversible capacity decreases from 929 to 576 mA.h/g with a fading rate of 3.5%per cycle. The fading mechanism is discussed. Serious capacity fading can be avoided by reducing the cycling voltages from 0.05-3.0 to 0.4-1.2 V. At the end, SnO2 nanorods with much smaller size are synthesized and their performance as anode materials is studied. The size effect on the electrochemical properties is briefly discussed.